September 14, 2015
The Nevada State Athletic Commission handed out a 5 year suspension to Nick Diaz after his drug test failure for use of marijuana following UFC 183.
In addition to his 5 year suspension, he was fined $165,000 which is 33% of his $500,000 fight purse from UFC 183. Diaz’s attorney, Lucas Middlebrook, indicated that they would appeal the commission’s decision. Middlebrook believes that the suspension was a “personal vendetta” against Diaz by the NSAC (h/t Brett Okamoto).
Diaz, who was present at the hearing, did not provide substantive testimony when asked questions by the commission asserting his Fifth Amendment right not to incriminate himself. Still, the commission asked him questions where Diaz continued to repeat “Fifth Amendment.” The commission believed that the Fifth Amendment relates to criminal issues whereas this was a civil proceeding. Diaz’s lawyers argued that the U.S. Constitution and the Nevada State Constitution trumps the commission rules.
It was a contentious hearing in which a lifetime ban for Diaz was discussed by the commission members. The 5 year ban may still end Diaz’s career.
Diaz passed the first and last of the three tests he took for UFC 183. Two different labs analyzed the tests. He failed the second test. The attorneys for Diaz, who were far more prepared for this hearing than Anderson Silva’s lawyers, provided a medical expert that it was “medically implausible” that Diaz could register the levels of marijuana measured by the three different labs. The AG for Nevada argued that the conflicting results did not negate each other and pointed to Diaz’s pre-fight questionnaire (which seems to be the silver bullet in these proceedings) where Diaz did not indicate he took marijuana leading up to his fight.
We will see how this plays out but it looks like that Diaz’s attorneys will be filing a lawsuit in Nevada seeking judicial review of the commission’s ruling. The hefty suspension cannot be easily justified when you consider that Diaz was not taking a performance enhancing drug (i.e. anabolic steroids). Perhaps it is due to the fact that Diaz did not correctly report his drug use on the questionnaire or his past history of marijuana use which caused the severe suspension. Regardless it’s a stiff sentence which almost invites further legal action.
September 2, 2015
This past Monday attorneys for Al Haymon and other Haymon entities sued in the antitrust lawsuit brought by Top Rank in Los Angeles have filed a Motion to Dismiss the complaint in its entirety. A hearing is set for October 5, 2015.
The Haymon Defendants (as they are identified in the moving papers) state that all of the antitrust claims should be dismissed and that the violations of the Muhammad Ali Act should be dismissed as well.
Notably, in response to Top Rank’s claim that Premier Boxing Champions strategy of purchasing time buys as a “loss leader” strategy to “tie out” other competitors is false. Rather, it states the move as a “pro-competitive innovation” meant to promote interest in the sport with regularity and at minimal cost “with the intention of expanding the diminishing fan base for the sport,” according to its motion.
The attorneys for Haymon point to the lack of evidence from Top Rank reflecting the predatory nature of Haymon in which it foreclosed opportunities for Top Rank to promote or sign boxers or were financially damaged from its practices.
It also stated that Top Rank’s use of the Ali Act is incorrect as only boxers are entitled to use the federal law.
According to records obtained by the Sports Business Journal, PBC was backed by at least $448M from a $23B mutual fund managed by Waddell & Reed Financial. Per the SBJ, in its latest SEC filings, as of June 30, 2015, Haymon Media Group Holdings are down $155M from its initial cost of $448M in 2013. It is believed that this is the part of the Waddell Fund that funds PBC. One may assume that the losses are based on the investment in PBC.
(H/t: Bill King)
MMA Payout will have a more detailed evaluation of the motion to dismiss in the coming days. The motion was expected at the outset even with a similar lawsuit filed by Golden Boy. One would assume that a similar motion is in the works for the Golden Boy lawsuit although there was an arbitration hearing on the matter in July to decide whether the arbitrator or a court would decide Golden Boy’s lawsuit.
August 29, 2015
Plaintiffs on behalf of the fighters in the UFC Antitrust lawsuit have filed a Motion for Protective Order as a result of what it claims to be an exclusion from discovery of one of its main attorneys.
As is the case in litigation where there are sensitive materials that will be shared by opposing sides via discovery, the court required the parties to work together to come up with a protective order which would serve as the guidelines for the exchange of information. A concern by plaintiffs is that Zuffa lawyers seek to exclude Rob Maysey, an attorney for Plaintiffs, from “highly confidential” information.
Via Plaintiffs’ Protective Order:
Zuffa has proposed an unusual special “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” designation in the Protective Order that would apply to “extremely sensitive, highly confidential, non-public information, consisting either of trade secrets or other highly confidential information directly concerning business plans, strategies, revenues or costs, disclosure of which to another Party or Non Party would create a substantial risk of significant competitive or business injury to the Designating Party that could not be avoided by less restrictive means.” Zuffa [Proposed] Order ¶ 2.7.
The attached exhibits to the Motion for Protective Order include a back and forth exchange on discovery between the parties which cover such issues as retention of data and other pertinent eDiscovery information as to when Zuffa would provide its data and in what form. Most, if not all of this information will be provided electronically and uploaded in reviewable databases for attorneys to review.
As for the interesting stuff, Zuffa is proposing two tiers of confidential information. Essentially, Zuffa wants Maysey “firewalled” from the discovery deemed HIGHLY CONFIDENTIAL. Plaintiffs argue that the definition proposed by Zuffa would preclude him from a broad swath of material. Plaintiffs claim that Maysey is central to the litigation and would impair his ability to assist his clients and prepare for trial. On the other end, Zuffa argues that Maysey is a “competitor” of the UFC according to its attorneys as he founded the Mixed Martial Arts Fighters Association. The claim is that Maysey should not be allowed to view contracts and sensitive business materials which Zuffa claims he might use for future prospective gain.
The argument is that Maysey and a partner at one of the other plaintiffs’ firms, Neal Tabachnik (who has represented MMA fighters in the past) should be precluded from HIGHLY CONFIDENTIAL Information. Plaintiffs seek an order from the court which would preclude Zuffa’s argument that Maysey is precluded from seeing the HIGHLY CONFIDENTIAL information.
Exhibit 1 (attached to Plaintiffs’ Motion) is a letter from Plaintiffs’ lawyers to Zuffa lawyers. Specifically, the argument points out the reasons why the confidential designations are overbroad and why Maysey should be allowed to view documents.
The full letter is below:
Exhibit 2 is a response from Zuffa lawyers to the above letter:
I could not highlight the pertinent sections in the letter from Zuffa’s attorneys but it essentially spells out its position by pointing to case law that dual tiers of confidentiality is not unusual and that Maysey’s involvement in MMAFA warrants that he is blocked from viewing HIGHLY CONFIDENTIAL documents. It cites to the MMAFA web site and his own law firm bio as to reasons why he should be firewalled for viewing documents. Notably, Zuffa points to a 2009 MMA Payout article in which Maysey was interviewed by Robert Joyner.
Notably, Maysey filed a declaration with the Motion for Protective Order which mentions that he is the “principal client liaison” with the fighters in this litigation. However, what it does not say is that he is trial counsel for the lawsuit (i.e., he will be in court trying the case if it gets to that point). This could be a major distinction when arguing whether or not an attorney assisting in preparing the case is essential in the discovery process. Moreover, Maysey states in the declaration that he founded MMAFA but does not own or “head” the MMAFA. Also, he does not profit from it. But, the issue that Zuffa will press is that he founded the organization and the web site maintains he is still a part of the organization.
This is a case of the internet coming back to bite back. Zuffa’s attorneys have done its due diligence in scouring the web for information on Maysey and MMAFA. One might see this as picking on someone that had attempted to help fighters seek out benefits. Its clear Maysey was emotional during the initial press conference announcing the lawsuit. We now see a strategy employed by Zuffa to block him out of the litigation. Coincidence or not, this is litigation and this is what happens.
Two tiers of confidentiality is not unusual in litigation especially when highly sensitive material such as trade secrets are involved. Zuffa’s arguments are valid but it will be how broad the definition of HIGHLY CONFIDENTIAL is that the court will look at when deciding whether or not it would be valid to preclude Maysey from looking at documents. Certainly, one would think the court would have to balance its decision on the right for the plaintiffs’ attorney to communicate with his clients and prepare for trial. MMA Payout will keep you posted.
August 24, 2015
Earlier this month the UFC filed its appeal brief to the Second Circuit Court of Appeals with respect to its dismissed lawsuit against New York. The appeal focuses on Zuffa’s claims that MMA is protected by the First Amendment and that Plaintiffs have standing to press their challenge that the law prohibiting MMA in the state is unconstitutionally vague.
For those that are subscribers to the Sports Business Journal, I provide a lengthier in-depth analysis of the implications of Zuffa’s First Amendment appeal as a guest columnist in this week’s edition.
This past spring Judge Kimba Wood of the Southern District of New York dismissed Zuffa’s lawsuit which attempted to overturn the law banning professional mixed martial arts in the state. The UFC retained former U.S. Solicitor General Paul Clement to handle the appeal which was filed this spring in the Second Circuit.
The two primary issues that Zuffa focuses on in its appeal is its First Amendment claim that MMA deserves free speech protection and that the statute is unconstitutionally vague.
We will focus on the First Amendment appeal in this post and address the vagueness claim in another post later this week.
In its appellate brief filed on August, it argues that live entertainment, including MMA is presumptively entitled to First Amendment protection when performed in front of a live audience. This is based on the belief that implicit in the statute prohibiting MMA in New York according to Clement, is that the New York law restricts live MMA but does not prohibit the practice of MMA in gyms and training facilities across the state. Thus, the district court, as Clement writes “missed the forest for the trees.” Essentially, Judge Wood evaluated the law banning pro MMA in the state from the aspect as to whether MMA is inherently expressive when not part of a live performance. Clement asserts that it is “backwards” rationale. “As the Supreme Court has confirmed time and again, performing before an audience is what brings conduct that might not otherwise be expressive within the scope of the First Amendment,” writes Clement. The brief goes on to further argue that “a law that singles out for prohibition public exhibitions of perfectly lawful conduct is plainly problematic…”
It’s clear that MMA falls within the ambit of free speech and so Clement argues that the state of New York cannot contend that the message MMA live events convey is not entitled to First Amendment protection. He goes on to argue on behalf of the UFC that the district court dismissed the First Amendment claim, in part, due to the fact that even though live MMA conveyed a “particularized message,” it must be “understood by those viewing it.” Clement negates the belief citing the fact that whether the conduct involves lives performance before an audience, the case law suggest that there is no other need for further inquiry. As stated above, the law specifically addresses live MMA and since the law specifically seeks to regulate live MMA, there should be no further evaluation as to whether the audience will understand the particular message.
The response brief from New York will be filed the first week of November. At that point, the UFC will have a chance to reply to the response brief.
The appeal before the 2nd Circuit will not be decided until sometime in 2016 (if that) as the appellate court does not have a hard timeline to make a decision. If the court determines that MMA deserves First Amendment protection, it could have bigger implications than just MMA as one might conclude that sports in general could receive First Amendment protection. Moreover, it may impact technology like live streaming phone apps such as Periscope and Meerkat. If MMA, and sport by extension, is determined to have First Amendment protection, then what would prohibit an individual from live streaming an event for others to watch online? Another broader issue also addresses the intersection of a league’s intellectual property versus First Amendment protection. We have seen leagues and its sponsors attempt to use Periscope with the eventual hope of monetizing it and take advantage of its content. If the general public is allowed to stream sporting events using their phones, leagues and sponsors face an issue.
Although this was not brought up as a big issue, MMA Fighting’s Marc Raimondi was prohibited from using Periscope during fight week leading up to UFC 189. It was later clarified to him (according to Raimondi in a subsequent tweet) that he just could not Periscope during the actual night of the fight. For those wondering, I had reached out to the UFC to see if it had an official policy on live streaming its events. I did not receive a response.
MMA Payout will keep you posted on the appeal.
August 18, 2015
ESPN reports that lawsuits filed as a result of the alleged fraud in the Manny Pacquiao-Floyd Mayweather fight this past May will be sent to California. Judge R. Gary Klausner will decide class action status prior to a trial date is set and the court may also decide whether to consolidate the 32 plus cases filed against Pacquiao for not revealing an injury prior to the May 2nd fight.
As you recall, Manny Pacquiao revealed post-fight that he was suffering from a shoulder injury and was denied a pain-relieving injection by the Nevada State Athletic Commission. That piece of information was not revealed in Pacquiao’s pre-fight questionnaire or through any other means. Thus, individuals that bought the $100 PPV claimed that the promoters misrepresented the fight since Pacquiao was not healthy.
Last Friday, a panel of judges decided that that claims filed in several states will be heard in the Central District of California (Los Angeles) where Pacquiao’s claimed injury occurred. It is also where Pacquiao makes his U.S. residence. The panel also discussed the possibility of consolidating the number of related lawsuits.
ESPN also quotes the U.S. Judicial Panel on Multidistrict Litigation which stated that Pacquiao’s rotator-cuff injury would require “significant factual, and possibly expert, discovery.”
There are at least 32 lawsuits filed across the United States related to the fight claiming that the boxer should have, or perhaps had a duty, to report the injury.
Most of the lawsuits name Pacquiao and his promoter Top Rank. Some also name Mayweather, HBO and Showtime.
In addition to the antitrust lawsuits between Al Haymon and Golden Boy and Top Rank in the Central District, it looks like it will get the Pacquiao lawsuits. Short of a settlement, we may see some interesting information come out regarding the factual information behind who knew what, when. Consolidating the cases and class certification are different issues at this point but look to be addressed by the Central District of California. Defense lawyers claim that this lawsuit is without merit. We will keep you posted.
August 5, 2015
ESPN reports that boxing promoters for former junior middleweight world titleholder Demetrius Andrade have filed a lawsuit against Jay Z’s Roc Nation Sports in New York.
The promoters Artie Pelullo of Banner Promotions and Joe DeGuardia of Star Boxing claim that Jay Z’s boxing promotion arm intentionally interfered with their exclusive contractual agreement with Andrade.
The lawsuit seeks $20 million in damages plus punitive damages. The lawsuit claims Roc Nation and boxing attorney Jeff Fried tried to lure the boxer away from his promoters.
Essentially, Roc Nation Sports attempted to negotiate a promotional agreement with Andrade even though they knew he was under contract. The lawsuit claims that Roc Nation Sports met with Andrade and his manager under the guise of discussing marketing opportunities but indicated it wanted to promote him. Further allegations state that Roc Nation claimed to be attempting to purchase Andrade’s promotional rights and would find a lucrative bout for him on HBO. It also claims it offered Andrade $550,000 not to participate in a Showtime fight that his current promoters had negotiated for him.
Andrade has not fought in 14 months and due to his inactivity, he has been stripped of his WBO junior middleweight title.
Roc Nation Sports have declined comment although they were aware of the lawsuit.
Here’s another case of a battle between promoters and the boxer is left in the middle. Andrade has not fought in some time and his refusal to fight on a Showtime card with the promise of a better payout on an HBO card seems to be a terrible misstep since he was never given an HBO fight. Titles are not everything in boxing so stripping Andrade is not the worst thing. What is worse is a great talent is wasting his formative years (and greatest earning potential) mired in legal troubles.
July 30, 2015
A Nevada judge has denied Zuffa’s motion to stay discovery in the antitrust lawsuit filed by former fighters. In addition, it appears that the court will want the parties to come up with a plan to allow the plaintiffs some of its discovery requests.
A Motion to Dismiss the lawsuit brought by Zuffa has yet to be heard by the court after the case was transferred from San Jose to Las Vegas but the court’s allowance of some of the discovery might infer that this case will not.
U.S. Magistrate Judge Peggy A. Leen denied Zuffa’s Motion to Stay Discovery. The order indicates that “[t]he parties are directed to meet and confer and submit a proposed form of Confidentiality and Protective Order, as well as ES1 Protocols, within 30 days from today’s date [July 28th].”
In addition, the order stated that the Court “is going to impose restrictions on discovery while the District Judge considers the pending Motion to Dismiss…” it goes on to state, “Plaintiffs’ Counsel are encourage to reconsider their broad discovery requests.”
In federal court, there is a discovery “master” or judge that determines discovery disputes as was done here. Judge Richard Boulware will preside over the actual court case. This differs from state court where the trial court judge typically decides discovery motions too.
H/t: Bloody Elbow
The ruling appears to be a “cookie-cutter” of sorts as you might infer that the encouragement by the Court for Plaintiffs to reconsider its “broad” requests suggests that the Court does not want to grant Zuffa’s motion to halt discovery. But, it acknowledges that the requests for a broad swath of financial statements, balance sheets and other receipts going back years and years is too cumbersome and unwieldly. Thus, Plaintiffs will get a chance to obtain some documents but perhaps not everything it is seeking. Despite not getting everything it asks for, Plaintiffs might get enough information to amend its complaint and survive a motion to dismiss. In the alternative, you might think of this as the Court allowing Plaintiffs the opportunity to obtain some documents prior to the Court dismissing its case. Hence, it was given a chance to prove its case.
The parties are to “meet and confer” to come up with a plan for discovery. This happens a lot in discovery disputes where the Court forces the sides to work together. Even with the hope of compromise, we still may see issues sprout up and fights over certain requests/documents. Clearly, Zuffa will want to protect certain information while Plaintiffs will deem it discoverable. We shall see how expansive this discovery fight continues and whether it plays into the inevitable Motion to Dismiss.
July 29, 2015
Zuffa has sued Wanderlei Silva in the District Court of Clark County Nevada. The lawsuit alleges Silva wrote on his Facebook that the UFC fixes fights.
The lawsuit was filed on Tuesday by Campbell and Williams, the law firm representing Zuffa in this matter.
A section of the complaint describes Silva’s “Campaign of Harassment Against the UFC.”
The complaint identifies a September 2014 video where he criticizes the UFC “voicing a number of rambling and baseless complaints against the organization” per the complaint. It goes on to state that it has monitored Silva’s remarks which it largely dismissed but believes he crossed the line when he proclaimed that the UFC fixes fights. The latest statement from Silva came on July 23rd when he wrote about the UFC on Facebook. He ended by stating, according to the complaint: “…fixed fights and I can prove this! I still haven’t dropped the bomb, I haven’t told everything I know!!!” (emphasis added).
The UFC then cites a second post the same day: “[a]nd I’m going to fight until the end, to unmask those promoters, that are eluding people!! And cheating taking the dignity and the honor of our sport! It’s turning into “wwe telecte!!!”…With fixed fights we have to stop Those guys since this is the end of the line for us!!!” (emphasis added). Although both posts were in Portuguese they were easy to translate.
The causes of action include Defamation Per Se and Business Disparagement. The complaint claims that Silva’s allegations of fight-fixing are “even more heinous” considering the Fertittas are linked to Nevada’s gaming industry.
Zuffa is looking for compensatory damages in excess of $10,000, punitive damages to be proven at trial as well as attorney fees and costs.
H/t: Robert Cardenas.
To prove a claim for defamation, one has to prove a statement either spoken or written injures someone’s reputation. Here, Silva posted his thoughts about the UFC on his Facebook page. Clearly, stating that the UFC fixes fights damages the UFC’s reputation. The relevant defenses to a defamation claim are the truth and/or privilege. There are also other carveout defenses such as the alleged defamatory statement was one of opinion and there was consent to publicize the alleged defamatory statement. In this case, there is no privilege, so Silva will need to rely on what he claims he has which is information that the UFC fixes fights. The business disparagement claim is similar to prove. Essentially, there must be an injurious statement that is publicized that would discourage people from dealing with the business. Obviously, claiming the UFC fixes fights would make fans not want to buy its PPVs. As for defenses, they are similar to defamation as the accused party can claim the statement was the truth.
The UFC decided to sue Silva as its reputation and integrity was called into question. While Silva may be disgruntled about a lot of things, claiming the UFC fixes fights goes over the line. He may argue that his statements were a matter of opinion but the posts clearly indicate that the UFC allegedly fixes fights. Does Silva have proof? We will see if this case moves to discovery. At the outset, I believe Silva’s lawyers will attempt to dismiss this lawsuit prior to it getting any further. We shall see.
July 27, 2015
Arbitration briefs have been filed in the Al Haymon-Golden Boy case in which Haymon’s attorneys are seeking to stay the court case claiming that an arbitrator should decide the promotion’s grievances against Haymon and his business entities. Arbitrator Daniel Weinstein is set to hear the parties’ arguments on July 29th.
Golden Boy argues in its brief to the Arbitrator that it does not have jurisdiction over the federal claims it filed against Haymon and his business entities this past May. It states that the parties’ agreement was not “clearly and unmistakably” granting authority to arbitrate its particular dispute outlined in the May 5 lawsuit. In addition, it states that Bernard Hopkins, a party to the lawsuit, is not a party to the Settlement Agreement signed by Golden Boy last December which Haymon’s attorneys claim negate GB and Hopkins’ federal claims which include Antitrust and Ali Act violations. Hopkins is a plaintiff in the Golden Boy lawsuit. Even if the Arbtirator claims that he has jurisdiction over the parties, Golden Boy argues that the federal claims are not within the arbitration clause and that the arbitration provision does not cover the term’s end.
The overall suggestion here is that the federal claims cannot be decided by an Arbitrator because the claims were never waived in the Settlement Agreement and/or the release of claims were not arbitrable.
In its opening arbitration brief which includes several sections that are redacted, Haymon’s attorneys argue that the Arbitrator has the exclusive jurisdiction to determine whether the federal claims are subject to the December 2014 Settlement Agreement executed between Haymon and Golden Boy. It argues that Golden Boy has come up with the date of January 1, 2015 to “plead around” the Settlement Agreement signed by the parties. Essentially, Haymon argues that the alleged monopoly and claimed violations of the Muhammad Ali Act existed on December 19, 2014. Thus, the Haymon camp claims that the claims relate to the Settlement Agreement entered into by Haymon and Golden Boy. As for Hopkins, it argues that he is a shareholder in GB and the argument that it was not a party to the Settlement Agreement falls flat.
Haymon’s attorneys stress that “there is no explanation for Golden Boy starting its federal claims on January 1, 2015.” This contention is in response to Golden Boy’s lawsuit which claims injuries sustained beginning on January 1, 2015. In its briefing, Haymon attorneys stress that it had signed a bulk of the 100 fighters prior to the December 19th Settlement Agreement. Thus, any sort of claim violating Antitrust laws or the Ali Act would have occurred prior to the parties entering into the Settlement Agreement.
Haymon’s attorneys also point to the broad release language in the Settlement Agreement in arguing that the release covers the present claims in the Golden Boy lawsuit. They argue that Golden Boy could have negotiated for terms within the Settlement Agreement that would have addressed the issues currently before them.
We could know this week whether one of the two Antitrust lawsuits filed against Al Haymon will be put on hold. One would think even with an Arbitrator ruling on jurisdiction, we will see an appeal by one of the sides. It’s clear that the ruling will hinge on the language within the Settlement Agreement regarding the arbitration of the agreement. We will keep you updated.
July 22, 2015
The Washington Post reports that the lawsuit between WWE doctor Chris Amman and CM Punk and Colt Cabana will continue after a Cook County (IL) Circuit Court judge denied defendants’ motion to dismiss the case.
As a result of the court’s denial to dismiss the case, CM Punk and Colt Cabana must answer Amann’s complaint claiming that the two libeled the WWE doctor during an episode of Cabana’s podcast.
On the Art of Wrestling podcast, Punk called into question Dr. Amann’s treatment of his concussion and an injury on his back with was diagnosed as a MRSA staph infection. Cabana is being implicated for being the host of the podcast. He is also a good friend of the now UFC fighter.
The WWE aided Dr. Amann despite not being a party to the lawsuit as it sent out a statement regarding the lawsuit and providing video purported evidence that Punk did not have a lump on his back.
Procedurally, a motion to dismiss the lawsuit prior to answering the claims in a complaint is necessary and occurs when the one being sued believes that there is no merit to the claims. Here, Punk and Cabana took their shot at dismissing the lawsuit. But, there was a sufficient amount of information pled by Dr. Amman according to the court. Its likely Punk and Cabana will deny the allegations in the Complaint when they file an Answer and we may see prolonged litigation.